Amid Red Ink, Tax-Exempts Asked To Add To Coffers

State and local governments, eager to close their budget gaps, are increasingly going after charities and other tax-exempt groups. Government officials are proposing new fees on nonprofits to help pay for services. They're also challenging the exemptions these groups get from sales and property taxes.

Tim Delaney, president of the National Council of Nonprofits, says these moves couldn't come at a worse time.

"Corporate donations are down significantly. Individual giving is down. Foundation giving is down substantially," even though demand for charitable services is up, he says. Delaney says adding more costs will only hurt taxpayers in the long run because there's high demand for the types of services — such as health care and food pantries — that many nonprofits provide.

Doug Sauer, head of the New York Council of Nonprofits, agrees that well-off groups should chip in more if they can. "All it takes is public opinion to switch on this," he says. "So we want to protect the integrity of the exemption, but we also want people to be accountable for the privilege of being able to have exempt property."